Add this eye-popping statistic to the list of superlatives driving crypto’s latest boom cycle: A record $520 million stampeded into BlackRock Inc.’s Bitcoin ETF in a single day.
The iShares Bitcoin Trust (ticker IBIT) saw its biggest one-session haul Tuesday, marking the largest daily inflow so far among the batch of new US exchange-traded funds investing directly in the world’s biggest cryptocurrency. It was also the second-largest daily intake for any US ETF across all asset classes, data compiled by Bloomberg show. And the trading mania continued into Wednesday.
As Bitcoin surges past $60,000 and on toward a new record, the rush of cash into BlackRock’s fund helps explain the digital asset’s remarkable rally this year. Just as proponents of the ETFs predicted would occur, their arrival last month has kicked open the door to fresh investment, giving the likes of wealth managers, hedge funds and everyday investors a new avenue for sinking capital across the asset class.
“The rally does appear to be majorly influenced by the BTC ETFs,” said Stephane Ouellette, chief executive of FRNT Financial, an institutional platform focused on digital assets. “Some estimates suggest that less than 20% of investment advisers have been approved by their firms to put their clients into the product. That is a process that’s likely to play out over the course of a year.”
Bitcoin advanced for a fifth straight day, pushing the price of the oldest cryptocurrency to its highest in two years and putting it within sight of its all-time high of nearly $69,000. The gains helped fuel a broad rally in digital assets, with activity so frenzied, it triggered a spate of outages at crypto exchange Coinbase Global Inc.
Year to date, Bitcoin is up more than 45%, making it a top performer among any kind of asset even after surging last year. The new funds have played a defining role, with anticipation of their approval helping fuel 2023’s advance.
Bitcoin scaling two-year highs will “further inspire ETF sales as a milestone threshold,” wrote strategists at JPMorgan and Chase including Kenneth Worthington.
In step with Bitcoin’s recent gains, the $6.5 billion IBIT has seen 32 straight days of inflows. Close behind is Fidelity Wise Origin Bitcoin Fund (FBTC), which saw daily inflows since its launch as well. The Fidelity fund has attracted net inflows of $4.48 billion since its inception.
The inflows underscore the growing — and steady — appetite for spot Bitcoin ETFs. The trend also highlights the ease of trading assets via ETFs designed to track them, and why investors have long pushed for Bitcoin funds.
As of midday Wednesday, nine of the Bitcoin ETFs — excluding the Grayscale Bitcoin Trust (GBTC) — saw combined daily trading volume of well over $2.6 billion, with IBIT again breaking its record as $1.5 billion exchanged hands, data crunched by Bloomberg Intelligence’s Eric Balchunas show. That IBIT is seeing the most activity isn’t that surprising given its dominance in the industry, said Jim Bianco of Bianco Research.
The flows are “definitely” driven by retail traders, he said by phone. “The flows are driving the price.”
